Student loan debt continues to make a splash in the news as the country begins to recognize how dangerous an overarching debt of $1.2 trillion is to the economy. The situation has worsened to the point that it is currently trickling into other aspects of the economy, especially the housing market. In the past, new college graduates and graduate students could buy home and look for a place to permanently settle down in a new job. Today, student loans have changed the situation drastically.
No Sale
Currently, people are staying in their jobs longer in order to pay off their student loans, build their retirement funds, and support their families. As a result, recent graduates don’t have access to once-existing job opportunities. Young adults are wary of settling down because they worry of being trapped in unfulfilling, low-paying jobs or coming up short on bills. In addition, the housing market over the past few years has been in flux, especially because homes remain a huge financial commitment for young adults unsure of their future.
Most importantly, recent graduates don’t have the money to pay their student loans and buy a house. Cheap apartments have become very popular, as has returning to one’s parents’ home. Almost half of Americans struggling with student loan debt cite their debt as the primary factor preventing them from owning a home. Even individuals over forty, many of whom have been steadily earning money for a number of years, still struggle with student loans, making all of their financial decisions with debt at the back of their minds. Until the crisis has been addressed, the housing market and the economy will continue to face an uncertain future.